key term - Limited liability company (LLC)

Definition

A Limited Liability Company (LLC) is a business structure in the United States that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. This means that owners (members) are protected from personal responsibility for debts and actions of the LLC.

Related terms

Sole Proprietorship:

A sole proprietorship is a business owned and operated by one person, where there is no legal distinction between the owner and the business entity.

Corporation:

A corporation is a legal entity that is separate and distinct from its owners, offering the highest level of personal liability protection to its shareholders.

Partnership:

A partnership is a business operation between two or more individuals who share management and profits